In a dramatic surge, gold and silver futures soared to unprecedented all-time highs on Monday, propelled by a potent cocktail of geopolitical anxieties and a brewing storm around the US Federal Reserve's leadership. Investors scrambled for traditional safe-haven assets, driving prices sharply upward in both domestic and international markets.
Domestic Markets Scale New Peaks
The rally was spectacular on the Multi Commodity Exchange (MCX). Gold futures for February delivery skyrocketed by Rs 2,431, or 1.8%, to settle at a historic peak of Rs 1,41,250 per 10 grams. Over the past week alone, the yellow metal has gained an impressive Rs 3,058, marking a rise of 2.25%.
Silver staged an even more powerful performance. March futures for silver exploded by Rs 11,271, a massive 4.46% jump, to touch a lifetime high of Rs 2,63,996 per kilogram. The white metal's weekly gain stood at Rs 16,409, translating to a staggering 6.94% increase, highlighting intense investor interest.
Global Rally Mirrored Amid Fed Turmoil
The bullion boom was a global phenomenon. On the Comex exchange, gold futures for February delivery advanced by $111.8 (2.5%) to reach a fresh record of $4,612.7 per ounce. Similarly, silver futures for March delivery rose by $4.56 (5.8%) to a historic high of $83.90 per ounce.
Market experts pinpointed the primary catalyst as heightened unease surrounding the US Federal Reserve. The alarm bells rang after it was revealed that US federal prosecutors have launched a criminal investigation into Fed Chair Jerome Powell. The probe relates to his June testimony concerning the central bank's $2.5-billion office renovation project, which has been heavily criticized by former President Donald Trump as excessive.
Geopolitics and Dollar Weakness Fuel the Fire
Analysts stated that this investigation has severely amplified fears about the Fed's political independence, casting a shadow of doubt over the future direction and stability of American monetary policy. This uncertainty directly prompted a flight to safety, with capital flowing into assets like gold and silver.
The rally found further support from a softening US dollar. The dollar index, which measures the greenback against a basket of major currencies, was trading lower at 99.03, making dollar-denominated bullion cheaper for holders of other currencies.
Simmering geopolitical tensions added more fuel to the fire. Market sentiment was weighed down by comments from former President Trump about considering military action against Iran, alongside a United Nations emergency meeting called over allegations of Russia deploying a new ballistic missile in Ukraine. This combination of political and military flashpoints deepened global market uncertainty, pressured the dollar, and reinforced the robust demand for protective assets.
(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
